Vehicle Taxability - Leasing & Dealers

Leasing and Auto Dealer Transactions

When buying a vehicle from an auto dealer, there are many options available to the consumer.  Here we will provide information on how the sales tax applies to the different transactions that may occur.

 

Leases

A lease is any transfer of the possession or control of tangible personal property for a fixed or indefinite term, for consideration. Leases include future options to purchase or extend, and agreements where the amount of consideration may be increased or decreased by reference to the amount realized upon the sale or disposition of the property.

The link below will take you to a memo drafted by the Ohio Department of Taxation explaining how leases of motor vehicles are taxed.

Leasing Memo

 

Sales to Non-Residents of Ohio

Please see the Information Release for details.

 

Frequently Asked Questions Tool

The Ohio Department of Taxation has compiled a list of frequently asked questions covering many different categories.

To view the questions, click on the "Select Category" bar and then click on  the category in which you are interested.  A list of questions will appear pertaining to that category. Then click on the question you are inquiring about and the answer will appear.

Are court-ordered title transfers subject to the sales or use tax?

Generally no, if the court ordered the transfer of title without consideration (divorce, dissolution, estate settlement, etc.).  If, however, the court orders the transfer of title and requires the new titleholder to give consideration (including cancellation of debt), the transfer is subject to sales or use tax.  The tax base is the actual amount paid. If no consideration and a court order, use ATPS exemption codes “CO: Court-ordered transfer with no consideration” or “DV: Divorce – court-ordered transfer with no consideration” or “IH: Inheritance with no consideration, includes surviving spouse.”

Are court-ordered title transfers subject to the sales or use tax?

Generally no, if the court ordered the transfer of title without consideration (divorce, dissolution, estate settlement, etc.).  If, however, the court orders the transfer of title and requires the new titleholder to give consideration (including cancellation of debt), the transfer is subject to sales or use tax.  The tax base is the actual amount paid. If no consideration and a court order, use ATPS exemption codes “CO: Court-ordered transfer with no consideration” or “DV: Divorce – court-ordered transfer with no consideration” or “IH: Inheritance with no consideration, includes surviving spouse.”